H-1B Series: The Labor Condition Application - Part 7

Other Important LCA Issues to Understand: Public Access Files, "No Benching" Rule, Changes in Location and DOL Enforcement

A. Public Access File and Retention of Records

Within one working day after filing the LCA, the employer must make the LCA and certain supporting documentation available for public examination at its principal place of business in the U.S. or at the place of employment, in what is commonly referred to as the "public access" file. The required documentation for the public access file includes:

A copy of the completed labor condition application containing the original signature, including any applications that were submitted to DOL by facsimile transmission.

Documentation which provides the wage rate to be paid the H-1B worker.

"A full, clear explanation of the system that the employer used to set the `actual wage' the employer has paid or will pay workers in the occupation for which the H-1B nonimmigrant is sought, including any periodic increases which the system may provide-e.g., [any] memorandum summarizing the system or a copy of the employer's pay system or scale."

As discussed previously, employers hiring H-1B workers are advised to have a clear, written pay system, with objective criteria against which all workers are measured. This provision requires that such a system be made available to the public as evidence of the employer's compliance with "actual wage" requirements. If the employer does not have such a pay system it must create a memorandum for the public access file.

A copy of the documentation the employer used to establish the "prevailing wage" for the occupation, such as the SESA determination, expert report, or survey information, which must include a "general description of the source and methodology" of the survey.

A copy of documentation indicating that the employer has satisfied the notice of filing requirements, which would include the collective bargaining representative notification or postings.

A summary of the benefits offered to U.S. workers in the same occupational classification as H-1B nonimmigrants, a statement as to how differentiation in benefits is made where not all employees are offered or receive the same benefits, and/or, where applicable, a statement that some or all H-1B nonimmigrants are receiving "home country" benefits.[1]

Where the employer undergoes a change in corporate structure, a sworn statement by a responsible official of the new employing entity that it accepts all obligations, liabilities, and undertakings under the LCAs filed by the predecessor, together with a list of each affected LCA and its date of certification, and a description of the actual wage system and Employer Identification Number (EIN) of the new entity.

A list of any entities used as part of a "single employer" definition for determination of H-1B dependency status.

Where the employer is H-1B dependent and/or a willful violator and files the LCA only for "exempt" H-1B nonimmigrants, a list of such persons.

Where the employer is H-1B dependent and/or a willful violator and the LCA is not filed for exempt H-1B nonimmigrants, a summary of the recruitment methods used and time frames of recruitment of U.S. workers, or copies of pertinent documents showing this information.

Other categories of documentation need not be made available to the public, but must be retained to provide to an examining officer of the DOL in the event of an investigation or enforcement action. These include payroll records, individual wage data which the employer relied upon in any survey to determine the prevailing wage, and other categories of required documentation to support the employer's compliance with LCA attestations, as described above. Records must be retained throughout the period of the LCA and for one year thereafter.

B. Payment of Required Wage and Prohibition on Nonproductive Status

DOL regulations mandate that the employer pay the required wage "to the employee, cash in hand, free and clear, when due." Both salaried and hourly employees must be paid no less often than monthly.

Once the H-1B worker has entered into employment, the employer is obligated to pay the required wage continuously throughout the nonimmigrant's period of employment. The practice of "benching," or placing an employee in temporary periods of nonproductive status without pay, is prohibited. It is a statutory violation of the required wage obligation for an employer to place the H-1B worker in nonproductive status based on factors such as lack of work, and fail to continue to pay the wage level stated on the LCA and in the H-1B petition. If the LCA and H-1B petition specified that the nonimmigrant would be employed full time, the employer must continuously make full-time wage payments. If the LCA and H-1B petition designated the position as part-time, the employer must continuously pay for the minimum number of hours specified in the petition. If the LCA specified part-time employment and the H-1B petition indicated a range of hours, the employer must pay for at least the average number of hours worked by the employee, not the minimum number of hours in the range. Congress added the "nonproductive" time provisions in ACWIA in 1998 after hearing testimony about alleged widespread practices of "benching" in the computer consulting and staffing industries.

In the case of an H-1B nonimmigrant for whom a petition has been approved but who has not yet begun employment, under the ACWIA statutory provision the employer's obligation to pay the required wage begins no later than thirty days after the worker is admitted to the U.S. in H-1B status pursuant to the petition, or sixty days after the person becomes eligible to work for the employer if he or she is already present in the U.S. at the time of petition approval.

Finally, there will be no violation of the required wage obligation when an H-1B nonimmigrant experiences a period of nonproductive status without pay due to (1) non-work-related factors such as the voluntary request of the nonimmigrant for an absence or (2) circumstances rendering the nonimmigrant unable to work such as maternity leave, illness, or temporary disability. Similarly, an employer such as a school which has an established practice of paying annual salary in disbursements over fewer than twelve months will not violate the required wage obligation, provided the nonimmigrant agrees to the compressed annual salary payments. Finally, wage payment need not be made if there has been a "bona fide termination" of the employment relationship. Whether there has been a "bona fide termination" depends on the circumstances, but regulations suggest that the two factors most important to DOL are whether the employer has (1) notified INS that the employment relationship has been terminated so that the petition is canceled and (2) met any obligation to provide the employee with payment for transportation home.

C. When a New LCA Is Required for a Change in Location

H-1B nonimmigrants often must travel to locations away from their regular worksite for varying periods; occasionally, they are transferred from one location to another on short notice. Such circumstances include attending meetings, training or conferences, providing on-site consultation or support services at a customer's premises, and working as "roving" consultants who work only at customer sites and who regularly change work locations based on the employer's business need. In each case, the H-1B nonimmigrant works at a location that was not contemplated at the time of the original LCA filing.

As a result, employers of H-1B nonimmigrants are limited in how often they can require the H-1B employee to change work locations without obtaining a new LCA covering the new location; ultimately, the employer might need to file a new LCA.

[a]- Place of Employment or Worksite

The terms "place of employment" and "worksite" are interchangeable throughout the LCA regulations. These terms refer to the "physical location where the work actually is performed" by the H-1B nonimmigrant. If an H-1B employee's activities are provided at a new "place of employment," then a new LCA might be required. If, however, the H-1B employee's activities do not create a new "place of employment," then the employer need not file a new LCA. Instead, the employment of the H-1B nonimmigrant continues to be governed by the original LCA. The employer must, however, reimburse the H-1B nonimmigrant for expenses incurred in traveling to the other location on the employer's business.

Close analysis of the regulations is necessary to determine whether a particular H-1B employee is providing services at a new place of employment or whether the activities are covered by the original LCA. This is because the DOL has exempted certain work activities from consideration in the determination of the "place of employment." For example, an H-1B worker who is "stationed and regularly works at one location" may temporarily work at another location for "required developmental activity such as a management conference, a staff seminar, or a formal training course." Under these circumstances, the location will not be a new "place of employment. Note also that no time limit is specified for the developmental activity.

The most significant exemption, for technology businesses, governs "roving" employees. This exemption describes where a "particular worker's job functions" require "frequent changes of location with little time spent at any one location." If the following conditions are met, a location visited by such an H-1B nonimmigrant is not a new "place of employment":

"The nature and duration of the H-1B worker's job functions mandates [sic] his/her short term presence at the location," either where the job is "peripatetic," requiring frequent travel from location to location, or where the job requires the worker to spend most work time at one location but occasionally travel for short periods to work at another location;

The H-1B worker's travel to the location from the home worksite is on a "casual, short-term basis," which can be "recurring but not excessive," with the duration of visits not exceeding five consecutive workdays for any one visit by a peripatetic worker, or ten consecutive workdays for any one visit by the occasional traveler; and

The H-1B nonimmigrant is not at the location to perform services in an occupation where workers are on strike or in lock-out.

The regulations provide several examples of "non-worksite" and "worksite" locations based on these principles. A "computer engineer sent out to customer locations to 'troubleshoot' complaints about software malfunctions" or an "auditor providing advice or conducting reviews at customer facilities" are examples of employees at non-worksite locations. In contrast, a "computer engineer who works on projects or accounts at different locations for weeks or months at a time" or an "auditor who works for extended periods at the customer's offices" are examples of an employee working at a new "place of employment."

[b]- Area of Intended Employment

If the H-1B worker's activities create a new "place of employment," the next question is whether the worksite is in a different "area of intended employment" from that specified on the original LCA.

LCAs are valid for any location within the Metropolitan Statistical Area ("MSA") or Primary Metropolitan Statistical Area ("PMSA") in which the place of employment stated on the LCA is located, or within "normal commuting distance" of the location. Thus, for example, if an LCA states that the H-1B employee's place of employment is a particular suburb of Boston, Massachusetts, then the LCA would cover (1) all locations within the MA/NH PMSA (# 1120 in the OES Area Code lookup system, see the Quick Search function) and (2) any other locations within a normal commuting distance.

If the H-1B employee's new place of employment is within the "area of intended employment" of the original LCA, then a new LCA is not needed. The employer, however, must provide notice of the LCA at the new worksite by hard copy posting or electronic notification to workers in the occupation at the worksite.

If the new "place of employment" is outside the "area of intended employment" listed on the original LCA, then the H-1B employee's assignment to the new "place of employment" may be made as a "short-term placement" subject to the requirements described in the next section, but beyond that the employer must obtain a new LCA to cover the new area of intended employment.

[c]- Short-Term Placement

An employer may make "short-term placement(s) or assignment(s)" of H-1B nonimmigrants to new places of employment in areas of intended employment not listed on the original LCA without filing a new LCA. Short-term placements may occur only under certain conditions for strictly limited periods, and only if:

The employer has satisfied all obligations under the existing LCA covering the H-1B worker in the original area of employment;

There is no strike or lockout at the new worksite in the occupational classification of the H-1B nonimmigrant; and

The employer continues to pay the required wage based on the original LCA and also pays all lodging, travel, meals, and incidental or miscellaneous expenses associated with the H-1B nonimmigrant's stay at the new location, for both workdays and non-workdays.

The employer's "short term placement" of any one H-1B non-immigrant at any worksite or combination of worksites in a new "area of employment" may not exceed thirty workdays in a one-year period, or, under certain circumstances, sixty workdays.

The term "workday" means any day on which an H-1B nonimmigrant performs any work at any worksite within the area of employment of the short-term placement. Workdays counted toward the limit may be nonconsecutive, and may be at different specific worksites within the area of employment. Weekend, holiday, or other non-workdays do not count, even if the H-1B nonimmigrant spends them in the area of the short-term placement. Thus, the thirty-workday limit would typically be about six weeks.

To qualify for a sixty-day "short-term placement," the employer must be able to show that the H-1B nonimmigrant maintains an office or work station at his/her permanent worksite, spends a "substantial amount of time" at the permanent worksite in a one-year period, and has his or her U.S. residence or place of abode in the area of the permanent worksite and not in the area of the short-term worksite.

If the employer already has a certified LCA for the occupational classification in the new area of employment, it may not use the "short-term placement" option. Instead, it must use its existing LCA, assigning the H-1B worker to an open "slot." If there is no open slot, the employer may wish to meet the notice, wage, and other obligations under the existing LCA for the H-1B nonimmigrant being placed in the area of employment, and promptly take steps to file a new LCA. Making the placement will then result in temporary "overcrowding" of slots on the existing LCA until the new one is approved. However, the DOL has expressly stated a willingness to accommodate the "overcrowding" problem for employers having a business need to quickly move an H-1B employee and wishing to use an existing LCA. It has indicated that it will use a "rule of reason in assessing such situations; violations will not be cited as long as the employer is showing good faith and taking steps to come into compliance."

The employer may not make a "short-term placement" for an H-1B nonimmigrant's initial assignment with the employer. An H-1B nonimmigrant entering the U.S. must first be placed at a regular worksite identified on the certified LCA used to support the H-1B petition.

Once an H-IB nonimmigrant has reached the aggregate annual limit of "short-term placement" workdays in an area of employment, the employer may no longer employ the person there except under a certified LCA. As a practical matter, then, the employer should determine as early as possible after the H-1B nonimmigrant is placed in a new area if it will need the person's services there for longer than the short-term placement limit, either on the project to which he or she is then assigned or on a later project in the same area, and if so file a new LCA in sufficient time so that it is certified before the time limit is reached.

[12]- Enforcement and Penalties

Any "aggrieved person" may file a complaint with the DOL alleging that an employer has failed to meet a condition stated on the LCA or that the employer made a misrepresentation of material fact on such an application. An aggrieved party means any person or entity whose "operations or interests" are adversely affected by an employer's alleged noncompliance with the LCA, including a worker who alleges that his or pay or working conditions have been adversely affected, a bargaining representative, a competitor, or a government agency. DOL will investigate and after providing the employer with an opportunity to be heard, will determine whether it should issue a finding that a violation has taken place and assess appropriate sanctions and penalties.

The statute and regulations provide several forms of penalty or sanction, depending on the nature of the violation. These include assessment of back wages for violation of a condition related to payment of the required wage. The DOL can also assess monetary fines and other civil penalties, and can bar the employer from receiving approvals of H-1B petitions for periods of time. For nonwillful violations, the DOL can issues fines of up to $1000 per violation and bar the employer from the H-1B program for one year. For "willful" failure to meet an LCA condition or a misrepresentation, the DOL can fine up to $5000 per violation and bar the employer from the H-1B program for two years. For such "willful" violations where in the course of the violation the employer displaced a U.S. worker, the DOL can fine up to $35,000 per violation and bar the employer from the H-1B program for three years.

[1] Where an employer is part of a multinational corporate operation and employs H-1B nonimmigrants in the U.S. while on a foreign payroll, under certain circumstances it may maintain the person on benefits provided in his or her home country.

About The Author

George N. Lester IV is of the
Immigration Practice Group (the "Group") of the law firm of Foley,
Hoag & Eliot LLP. Foley, Hoag & Eliot LLP is a full-service law firm
of 200 lawyers in Boston and Washington, D.C. It was the first large
law firm in Boston to develop an expertise in business immigration
law, and for over thirty years its Group has represented employers in
a full range of procedures to obtain temporary or permanent
authorization to employ foreign professionals. Mr. Lester has
practiced immigration law for ten years, and regularly speaks to
business, academic, and professional groups on immigration topics. As
part of his regular AILA activities, Mr. Lester meets with officials
of the INS Vermont Service Center to discuss H-1B and other liaison
topics. He also serves as Treasurer and a Board Member of the
Political Asylum/Immigration Representation Project (PAIR) in Boston,
and received that organization's Pro Bono Attorney Award for
Dedication and Commitment to Human Rights in May 1996. Mr. Lester is a
1989 graduate of Northeastern University School of Law.